Answer:
Future costs which will be different under the two alternatives.
Explanation:
In simple words, while considering to replace the new machinery every entity must focus comely on two main aspects which are the historical cost or the cost at which the old machine could be sold and the future costs which will significantly affects the potential profits of the subject firm.
However, due to various different methods of depreciation and future value estimations one should consider all the methods in hand and then take the decision.
Consider an indifference curve for someone deciding how to allocate time between work (and thus consumption) and leisure. Suppose the wage increases. The substitution effect induces a person to work and consume in response to higher wages. If consumption is a normal good, the income effect induces the person to consume when the wage rises, but if consumption is an inferior good, the income effect induces the person to consume in response to higher wages. True or False: It is possible that the person's consumption falls as a result of the higher wage. True False
Answer: True if Consumption is of Inferior Good
Explanation:
Inferior goods are inversely related to wages. They are consumed because wages are less and people do not have the capacity to buy what they really want which are normal goods. If wages rise, people will leave Inferior goods for normal goods which is to reduce consumption of normal goods.
Examples of inferior goods are off brand cereals. Notice how as wages increase they are bought less of and instead their more popular counterparts are purchased.
Crane Company purchases Cullumber Company for $2390000 cash on January 1, 2021. The book value of Cullumber Company’s net assets, as reflected on its December 31, 2020 balance sheet is $1851000. An analysis by Crane on December 31, 2020 indicates that the fair value of Cullumber’s tangible assets exceeded the book value by $178500, and the fair value of identifiable intangible assets exceeded book value by $134000. How much goodwill should be recognized by Crane Company when recording the purchase of Cullumber Company? $539000 $360500 $226500 $0
Answer:
$226,500
Explanation:
The computation of the goodwill is shown below:
Goodwill = cash paid - book value of net assets - tangible assets exceeded the book value - fair value of identifiable intangible assets exceeded book value
= $2,390,000 - $1,851,000 - $178,500 - $134,000
= $226,500
We simply applied the above formula so that the goodwill amount could arrive
Products with positive externalities are underconsumed, thus creating a market failure. How can the government correct this failure? I. By taxing the output of the product to increase tax revenue II. By paying subsidies to the producers, to lower the cost of the product to potential buyers III. By reducing the marginal social benefit of the product, thus eliminating the externality IV. By requiring producers to manufacture more of the product V. By producing it themselves and distributing it free or at very low cost to consumers
Answer:
The government can correct the failure of consuming products with positive externalitiies by:
By paying subsidies to the producers, to lower the cost of the product to potential buyersExplanation:
A positive externality occurs when the production as well as the consumption of a particular product or service generates a social benefit that impacts on a third party not involved in the transaction.
Example of such products and services include, education, Telecommunication, good road, electric power, transportation and logistics services.
Take for instance, if the government pays money to the providers of electric power thereby subsidizing its cost, it will drastically reduce the cost of production and benefit the final consumers who will now purchase goods at cheaper rates.
Similarly, reducing the cost of education for low income earners will increase the participation of school goers among the under privileged and reduce drop out rates. the ripple effect is reduction in crime and increase in skilled labor for the nation's human resource capital pool.
Answer:
The answer is 2 and 5 ( II and V)
Explanation:
Even though no final conclusion is currently warranted, a number of research papers, including those of Fama and French, have argued that:________.
a. there is no noticeable difference in the returns of growth versus value stocks.
b. growth stocks outperform value stocks.
c. stocks with high book-value-to-stock-price ratios outperform stocks with low ratios.
d. no observable differences in returns can be associated with varying price-earnings ratios.
e. stocks with low earnings-to-price ratios outperform stocks with high ratios.
Answer:
c
Explanation:
Even though no final conclusion is currently warranted, a number of research papers, including those of fama and French, have argued that:
The correct option is option c.
c.stocks with high book-value-to-stock-price ratios outperform stocks with low ratios.
Rest all option are absurd in context of the question.
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.20 per unit. Bluebird currently produces and sells 75,000 units at $7.20 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler’s name and would not affect Bluebird’s sales through its normal channels. Production costs for these units are $3.80 per unit, which includes $2.35 variable cost and $1.45 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:
Answer:
Effect on income= $12,750 increase
Explanation:
Giving the following information:
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.20 per unit. Production costs for these units are $3.80 per unit, which includes $2.35 variable cost and $1.45 fixed cost.
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs:
Effect on income= 15,000*(3.2 - 2.35)= $12,750 increase
If the coupon interest rate remains constant from the time of issue until the bond matures, then the bond is called afixed-rate bond. The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called the . Which term is used to describe a call provision in which the issuer is prevented from calling a portion or the entire issue for several years during the early years of the bond issue? Deferred call provision Sinking fund provision Declining call provision
Answer:
Indenture
Deferred call provision
Explanation:
Indenture is defined as the contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds.
A call provision is defined as the right that the issuer of a security has to call or redeem the security at certain times and under specific conditions.
The call provision in which the issuer is prevented from calling a portion or the entire issue for several years during the early years of the bond issue is called deferred call provision.
Failure Mode and Effect Analysis is: a) a technique to determine the ways in which a technical system might fail (including the behavior of people) and the effects that identified failures would have on the performance, safety of the system and its environment b) a technique to analyze the mode in which equipment has failed and the effect it has caused c) neither off the above
Answer:
A technique used to determine the ways in which a technical system might fail(including the behaviour of people) and the effects that identified failures will have on the performance, safety of the system and it's environment.
Explanation:
Failure mode and effect analysis can be described as the various ways in which a potential risk is identified. It is an approach that is used to identify the causes and effect of the occurrence of a failure.
Failure mode and effect analysis helps to detect the various errors that might have occurred during the production of a product, it also studies the different effect of these errors on the consumers. This approach is used when redesigning a new product, It is a very essential part for the continuous improvement of the product.
The Tornado Truck Body Company decides to repurchase 10,000 shares of its common stock on January 20. The stock has $1 par value, and the market value per share of common stock on January 20 is $8.75. The company decides to sell 5,000 of the treasury stock shares on April 30 for $9.00 per share. What is the amount of the gain recognized as a result of the transaction
The amount of the gain recognized as a result of the transaction is $35,000.
Explanation:The gain recognized as a result of the transaction is calculated by subtracting the cost of the repurchased shares from the proceeds of the sale of the treasury stock. In this case, the cost of repurchased shares is $1 par value per share multiplied by the number of shares repurchased, which is 10,000. So the cost is $10,000. The proceeds of the sale of the treasury stock is the selling price per share multiplied by the number of shares sold, which is $9.00 per share multiplied by 5,000 shares. So the proceeds are $45,000.
The gain is calculated by subtracting the cost from the proceeds, which is $45,000 - $10,000 = $35,000.
Therefore, the amount of the gain recognized as a result of the transaction is $35,000.
Swifty Corporation spent $4400 to produce Product 89, which can be sold as is for $5500, or processed further incurring additional costs of $1650 and then be sold for $7700. Which amounts are relevant to the decision about Product 89
Answer:
Relevant:
$5,500
$1,650
$7,700
Explanation:
The only data irrelevant is the first production cost. The $4,400 is not relevant because it is a sunk cost. It will remain constant in both choices. The other costs and income are relevant because they vary on each decision. The $4,400 should not be a part of the decision making process.
Sam and Drew are equal partners in SD LLC formed on June 1 of the current year. Sam contributed land that he inherited from his uncle in 2013. Sam's uncle purchased the land in 1986 for $30,000. The land was worth $100,000 when Sam's uncle died. The fair market value of the land was $200,000 at the date it was contributed to the LLC.
Drew has significant experience developing real estate. After the LLC is formed, he will prepare a plan for developing the property and secure zoning approvals for the LLC. Drew would normally bill a third party $50,000 for these efforts. Drew also will contribute $150,000 of cash in exchange for his 50% interest in the LLC. The value of his 50% interest is $200,000.
How much gain or income will Sam recognize on his contribution of the land to the LLC? What is the character of any gain or income recognized?
Answer:
How much gain or income will Sam recognize on his contribution of the land to the LLC?
$0What is the character of any gain or income recognized?
None, since no gain or loss is recognized.Explanation:
§ 721 establishes that when partners' contribute assets (e.g. property) to a partnership or limited liability company, they do not need to recognize any gain or loss regarding the contribution.
In this case, Sam is contributing property to an operating partnership, so he does not need to recognize any gain or loss. His basis on the partnership will be $100,000 which is the current basis on the land. Sam's basis on the land is equal to the fair market value of the land when his uncle died. His uncle's estate was taxed back then for the gain between the original purchase price and the FMV.
Choose the correct statement.
A. Marginal revenue equals total revenue divided by quantity sold.
B. For a monopoly, marginal revenue equals price.
C. For a monopoly, total revenue equals marginal revenue multiplied by the quantity sold.
D. When price is lowered to sell one more unit, the lower price results in a revenue loss and the increased quantity sold results in a revenue gain.
Answer:
D) When price is lowered to sell one more unit, the lower price results in a revenue loss and the increased quantity sold results in a revenue gain.
When you offer a sales discount, you are losing revenue since marginal revenue is lower than price, but at the same time if the marginal revenue is ≥ to marginal cost, then your profit and total revenue is increasing.Explanation:
the other statements are false because:
A. Marginal revenue equals total revenue divided by quantity sold. FALSE, MARGINAL REVENUE IS THE REVENUE GENERATED BY SELLING ONE ADDITIONAL UNIT. B. For a monopoly, marginal revenue equals price. FALSE, FOR A MONOPOLY MARGINAL REVENUE IS LOWER THAN PRICE. C. For a monopoly, total revenue equals marginal revenue multiplied by the quantity sold. FALSE, TOTAL REVENUE = PRICE X QUANTITY SOLDWhen Chris Mittelstaedt says, "People like to be part of something bigger than themselves," what are the implications for employee motivation?
Answer:
When Chris Mittelstaedt says, “People like to be part of something bigger than themselves,"
He means that the Association or cluster of individuals whose one among the part an individual need to be. Once an individual is in him selves /her selves he's non-creative or unaccompanied, however once it get-together with an association of individuals, it efficiency increases and he/she could be a part of group/combination/establishment/relationship and not alone.
Mary Co. paid dividends of $5,000, $6,200, and $8,000 during Year 1, Year 2, and Year 3, respectively. The company had 1,700 shares of 3.5%, $100 par value preferred stock outstanding that paid a cumulative dividend. The company also had 5,000 shares of $1 par value common stock outstanding. What is the total amount of dividends paid to common shareholders during Year 3
Answer :
Amount of dividend paid =$1,350
Explanation :
The computation is shown below:
As per the data given in the question,
Dividend per year for preferred stock = $1700 × $100 × 3.5%
= $5,950
Particulars Year 1 Year 2 Year 3
Preferred dividend $5,000 $6,200 $6,650
($700+$5,950)
Preferred dividend in arrears $950 $700
($5,950-$5,000) ($5,950+$950-$6,200)
Therefore dividends for common shareholders is
= $8,000 - $6,650
= $1,350
Which of the following statements is correct? Revenue is recognized at the time of shipment when goods are shipped FOB destination. Sales returns and allowances are reported as operating expenses on an income statement. A seller records revenue when title and risks of ownership transfer to the buyer. Sales discounts are reported as cost of sales on an income statement.
Answer:
The correct answer to the following question will be Option C.
Explanation:
The buyers, as well as sellers, must negotiate an understanding as to who is capable of paying certain transport costs and also who, whenever the item is delivered, assumes the default risk throughout transportation.A seller reports compensation whenever the purchaser has the transition of titles as well as ownership uncertainties.The other three options are not related to a certain scenario. So that option C is the right answer.
Considering the available options, the correct statement is "A seller records revenue when title and risks of ownership transfer to the buyer."
Under the accounting principles, a seller can choose to record revenue in as much the sales have been made regardless of whether payment has been made or not.
In a business transaction, a sale has been made when the title and risks of ownership transfer to the buyer.
Hence, in this case, it is concluded that the correct answer is option C. "A seller records revenue when title and risks of ownership transfer to the buyer."
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As a group, oligopolists would always earn the highest profit if they would a. produce the perfectly competitive quantity of output. b. produce more than the perfectly competitive quantity of output. c. charge the same price that a monopolist would charge if the market were a monopoly. d. operate according to their own individual self-interests.
Answer:
The correct answer is C)
Explanation:
Oligopolists make the highest profits when they form a cartel that gives them the "advantage" of a Monopolist.
When they come together to agree on decision relating to price and units produced or supplied, they are able to adjust the said factors such that it gives them more profit that if they operated as single entities with slight competition against each other.
Cheers!
Oligopolists can earn the highest profit by acting as a monopoly, but individual interests and competition often drive them towards a state of perfect competition.
Explanation:To maximize their joint profits, oligopolists as a group should opt to act like a monopoly. This implies they should produce less than the perfectly competitive quantity of output (options a and b) and charge a higher price than perfect competitors, similar to a monopolist (option c). However, this is challenging in practice as individual oligopolists have incentives to produce more (option d) for higher individual profits. This action could lead to a situation akin to perfect competition, where all oligopoly firms may end up earning zero economic profits due to fierce competition. This dilemma is known as the 'Prisoner's Dilemma' in game theory. Therefore, while acting as a monopoly would maximize joint profits, individual actions often lead the market closer to perfect competition.
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An unfavorable labor efficiency variance is created when: Multiple Choice actual labor hours worked exceed standard hours allowed. actual hours worked are less than standard hours allowed. actual wages paid are less than amounts that should have been paid. actual units produced exceed budgeted production levels. actual units produced exceed standard hours allowed.
Answer:
actual labor hours worked exceed standard hours allowed.
Explanation:
In simple words, The variation in labor productivity tests the capacity to employ labor as expected. This variability is measured as the discrepancy between both the real working hours used only to manufacture an element, magnified by the standard labor rate, and the standard amount that would have been used.
Thus, from the above we can conclude that the correct option is A.
Wehrs Corporation has received a request for a special order of 8,600 units of product K19 for $45.50 each. The normal selling price f this product is $50.60 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product K19 is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $16.30 5.60 2.80 $30.40 irect labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The ustomer would like some modifications made to product K19 that would increase the variable costs by $5.20 per unit and that would equire a one-time investment of $45,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order.
Required: Determine the effect on the company's total net operating income of accepting the special order
Answer:
Increase in the net income=$ 89,160
Explanation:
The amount of the financial advantage or disadvantage would be determined as follows:
Unit variable cost of order = 16.30 + 5.60+ 2.80+5.20 = 29.9
$
Sales from special order) ($45.50× 8,600) 391300
Variable cost of special order ($29.9× 8,600) 257,140
Contribution from special order 134,160
Cost of special machine (45,000)
Increase in contribution 89,160
Increase in the net income=$ 89,160
Note the fixed manufacturing overhead is irrelevant, they are cost that would be incurred whether or not the order is accepted
Jordan Company produces basketballs and uses a standard costing system. Budgeted fixed overhead was $296,000. Rent changed during the year, causing actual fixed overhead to be $274,000. Jordan Company applies overhead on the basis of DLH. They projected 1,080,000 basketballs would be produced during the year. They actually produced 1,238,000 basketballs. The standard is 1DLH per basketball. They actually used 1DLH per basketball. What is the fixed overhead budget variance
Answer:
Explanation:
o
Fabulous Fabrics budgeted to manufacture 1300 curtains in February. Actual output for March was with total direct materials cost of $3700 and total direct labor cost of $5250. The direct labor standard is 20 minutes per curtain at a direct labor rate of $15.50 per hour. The direct material standard is 0.75 yards of direct materials per curtain at a cost of $11 per pound. Actual direct labor hours were 150.
A variance analysis for February may show a direct labor rate variance of ______. (Round any intermediary calculations and your final answer to the nearest cent.)
Answer:
$2,925 Unfavorable
Explanation:
The computation of direct labor rate variance is shown below:-
Actual rate = Direct labor cost ÷ Actual direct labor hours
= $5,250 ÷ 150
= 35
Direct labor rate variance = (Selling rate - Actual rate) × Actual hours rate
= ($15.50 - 35) × 150
= -$19.5 × 150
= $2,925 Unfavorable
Therefore for computing the direct labor rate variance we simply applied the above formula.
You are consulting for a beverage distributor who is interested in determining the benefits it could achieve from implementing new information systems. What will you advise as the first step? Group of answer choices Identify the business ecosystem the distributor is in. Implement a strategic transition to the new system. Perform a strategic systems analysis. Benchmark existing systems.
Answer: Perform a strategic systems analysis
Explanation:
According to the given question, the best advise is to perform a strategic system analysis for determining the various types of benefits by implementing the various types of new information system.
The main objective of the strategic system analysis is to conduct the various types of research in the company by formulating different types of strategy in an organization.
The strategic system analysis helps in measuring all the external as well as internal environment and evaluating all the business strategies.
Therefore, the given answer is correct.
The agreement of the trial balance totals is an indication that all transactions have been properly
recorded in the books of accounts. Do you agree with this statement?
Required:
Outline 4 reasons to justify your response
Answer:
NO, I do not agree with this statement.
Explanation:
So, a TRIAL BALANCE is a list in which all entries(debits and credits statement) for a particular business, firm, company or organization are kept and BALANCED. A trial balance also contains information about the organization or company's dividends, liabilities, expenses and many more.
The reason the Statement in the question is faulted is because TRIAL BALANCE does NOT prove the the record is ACCURATE, there is no guarantee that the record is ACCURATE although it shows to some extent that the record are PRECISED BUT NOT ACCURATE.
The Four Reasons to Justify the answer are;
(1). ERROR OF COMMISSION: error that occurs when amount is entered in a wrong account.
(2). ERROR OF OMISSION: error that occurs when data is being omitted.
(3). ERROR OF PRINCIPLE: error that occurs when data is recorded in the wrong ledger.
(4). COMPENSATING ERROR: this error cause offset of another error.
In your discussion post, think about some examples of exponential growth in the real world. They might be examples from science, medicine, or finances. Share two examples of exponential growth, and include a description of who would benefit from the information found in these examples. Also include, two examples of careers and jobs that would be difficult to work in if you didn't understand exponential growth. Describe why it would be difficult in these specific examples.
Answer: interest and population growth
Explanation:
Examples of exponential growth in real world.
1. interest on a savings account (finance). example when you deposit let say $1000 in an account that earns you a simple interest rate of 10% in a year you would earn $100, with each year the amount of interest paid continues to grow exponentially. The bank customer or owner of the account stands to benefit from this growth.
2. Population growth ( science ) population continues to grow exponentially overtime due to individuals available to produce not minding the available resources.a large population usually translates to a good economy development due to more people available so the citizen benefits from it.
Examples of career that it would be difficult to work in
1. Financial advisor
2. Bankers
For someone working as a financial advisor or banker would need the knowledge of exponential growth by understanding compound returns. In finance, compound returns leads to exponential growth. Compounding powers is part the most powerful tools in finance. This method is used by financial advisors and bankers for creating large sums from an initial deposit.
Estate Corp., has the following information: Month Budgeted Purchases January $27,600 February 29,400 March 28,500 April 30,480 May 27,680 Purchases are paid for in the following manner: 15% of the purchase amount in the month of purchase 35% of the purchase amount in the month after purchase 50% of the purchase amount in the second month after purchase What is the expected Accounts Payable balance as of May 31
Answer:
$38,768
Explanation:
January Purchases:
$27,600
January Payments:
15% of $27,600 = $4,140
February Purchases:
$29,400
February Payments:
15% of $29,400 = $4,410
35% of $27,600 = $9,660
Total February Payments = $4,410 + $9,660 = $14,070
March Purchases:
$28,500
March Payments:
15% of $28,500 = $4,275
35% of $29,400 = $10,290
50% of $27,600 = $13,800
Total March Payments = $4,275 + $10,290 + $13,800 = $28,365
April Purchases:
$30,480
April Payments:
15% of $30,480 = $4,572
35% of $28,500 = $9,975
50% of $29,400 = $14,700
Total April Payments = $4,572 + $9,975 + $14,700 = $29,247
May Purchases:
$27,680
May Payments:
15% of $27,680 = $4,152
35% of $30,480 = $10,668
50% of $28,500 = $14,250
Total May Payments = $4,152 + $10,668 + $14,250 = $29,070
Total Purchases = $27,600 + $29,400 + $28,500 + $30,480 + $27,680
Total Purchases = $143,660
Total Payments = $4,140 + $14,070 + $28,365 + $29,247 + $29,070
Total Payments = $104,892
Accounts Payable = Total Purchases - Total Payments
Accounts Payable = $143,660 - $104,892
Accounts Payable = $38,768
You own a two-bond portfolio. Each has a par value of $1000. Bond A matures in 5 years, has a coupon rate of 8 percent, and has an annual yield to maturity of 9.20 percent. Bond B matures in 15 years, has a coupon rate of 8 percent and has an annual yield to maturity of 8.20 percent. Both bonds pay interest semiannually. (a) What is the value of your portfolio?(b) If each yield to maturity rises by one percentage point, then the value of your portfolio is $1,748.28. True or False?
Answer:
True, The Value of the portfolio is $ 1748.28 , there is a reduction in value of portfolio due to increase in YTM rate.
Explanation:
Solution
Given that:
For Bond A
The Maturity period (n) = 5 years
The Coupon rate = 8% (coupon rate is paid semiannually)
Then,
The total semiannual period is 10.
YTM = R = 9.2%
Par value = $1000
So,
The Current price of the bond = Present value of all coupon cash flows + Present value of the bond at maturity
The Current price of the bond = 40*(1-1/(1+R/2)^10)/(R/2) + 1000/(1+R/2)^10
The Current price of the bond =40*(1-1/1.046^10)/.046 + 1000/1.046^10 = $952.756
For Bond B
The Maturity period (n) = 15 years
The Coupon rate = 8% (coupon rate is paid semiannually)
Then,
The total semiannual period is 30.
Thus,
YTM = R = 9.2%
Par value = $1000
So,
The Current price of the bond = Present value of all coupon cash flows + Present value of the bond at maturity
The Current price of the bond = 40*(1-1/(1+R/2)^30)/(R/2) + 1000/(1+R/2)^30
The Current price of the bond =40*(1-1/1.046^30)/.046 + 1000/1.046^30 = $903.406
Now,
The value of portfolio = $952.756+$903.406 = $1856.16 approx.
Thus,
If each yield to maturity increases by 1% point
Then,
YTM = 10.2%
The half yearly rate is 5.1%
The Current price of the bond A =40*(1-1/1.051^10)/.051 + 1000/1.051^10 = $915.48
The Current price of the bond B =40*(1-1/1.051^30)/.051 + 1000/1.051^30 = $832.82
This scenario changes to:
The Value of the portfolio = $915.48+ $832.82 = $ 1748.28
so, there is a reduction in value of portfolio due to increase in YTM rate.
The percentage decrease in value of portfolio = (1748.28 - 1856.16)/ 1856.16 = -5.81%
Round Hammer is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 175,000 shares of stock outstanding. Under Plan II, there would be 125,000 shares of stock outstanding and $1.7 million in debt outstanding. The interest rate on the debt is 5 percent, and there are no taxes. a. If EBIT is $325,000, what is the EPS for each plan
Answer:
1.86
Explanation:
Data provided as per the question is here below:-
Net income = $325,000
Number of shares outstanding = 175,000
The computation of EPS for each plan is shown below:-
EPS = Net income ÷ Number of shares outstanding
= $325,000 ÷ 175,000
= 1.86
Therefore for computing the EPS we simply applied the above formula.
Crusoe Waterworks Company provides plumbing services. Transactions of Crusoe Waterworks during the first year of operations are given below. a) The owner, Robin Crusoe, invested $5,000 cash in the company. The cash was deposited in the business checking account. b) Paid $4,000 cash for equipment to be used for plumbing repairs. c) Borrowed $26,000 from a local bank and deposited the money in the checking account. d) Paid $700 rent for the year. e) Purchased $1,500 of office supplies on account. f) Completed a plumbing repair project for a local lawyer and received $3,400 cash. Calculate the amount of total owner's equity after recording the transactions. Assume office supplies of $1,500 are left at the end of the year. Group of answer choices $7,700 $3,400 $5,000 $26,000
Answer:
$7,700
Explanation:
Equity of a company is Total Assets minus Total liabilities. Equity is the business worth for shareholders. For Crusoe Waterworks Company the equity will be the initial capital investment by Robin Crusoe plus any revenue received from the business operations.
The equity will be calculated by,
Equity = Capital Investment + Revenue - Expense
Equity = $5,000 + $3,400 - $700
Deal is a product of the Digby company. Digby's sales forecast for Deal is 505 units. Digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Deal's Production After Adjustment have to be in order to have a 10% reserve of units available for sale?
Answer:
Production Units = 555.5 or 556 units
Explanation:
Digby's Sales Forecast for Deal = 505 units.
Digby wants to have extra 10% of units = 100% + 10%
Taking current inventory into account? But, we don't know the current inventory in this question. So, We will calculate the that 10% extra only. If we knew the current inventory then we would have calculated after the adjustment of the current inventory.
Here's the formula to calculate the production units:
Production units = Number of Sales x (100% + Extra Units Percentage)
Production Units = 505 units x (100% + 10%)
Production Units = 505 units x 110%
Production Units = 555.5 or 556 units
Sneakers Incorporated designs and manufactures fashion sneakers. For the coming year, the company scheduled production of 50,000 sneakers. Budgeted costs for this product are as follows: Unit Costs Total (50,000 units) Variable manufacturing costs $40 $2,000,000 Variable selling expenses 15 750,000 Fixed manufacturing costs 12 600,000 Fixed operating expenses 10 500,000 Total costs and expenses $77 $3,850,000 The management of Sneakers is considering a special order from Discount Kicks for an additional 20,000 sneakers. These sneakers would carry the Discount Kicks label, rather than the Sneakers Inc. label. In all other responds, they would be identical to the regular Sneakers Inc. fashion sneakers. Although Sneaker Inc. regularly sells its sneakers to retail stores at a price of $180 each, Discount Kicks has offered to pay only $45 per sneaker. However, because no sales commissions would be involved with this special offer, Sneaker Inc. will incur variables selling expenses of only $10 per units on these sales rather than the $15 it normally incurs. Accepting the order would cause no change in the company’s fixed manufacturing cost or fixed operating cost. Sneaker Inc. has enough plant capacity to product 70,000 sneakers per year. A. Using incremental revenue and incremental costs, compute the expected effect of accepting this special order on Sneaker Inc. operating income.
Answer:
Net loss $100,000
Explanation:
The relevant cost for decision to accept the special order are
I Incremental Revenue from the special order
2. incremental variable cost
Note that whether or not the special order is accepted the fixed manufacturing and fixed operating expenses of would be incurred either way. Therefore , they are not relevant for the decision
Variable cost cost= 40 +10= 50
Sales revenue from the special order $
(45 × 20,000) 900000
Variable cost of the special order (50× 20,000) (1,000,000 )
Net loss 100,000
An outside supplier has offered to make the part and sell it to the company for $25.10 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part E14 could be used to make more of one of the company's other products, generating an additional segment margin of $25,500 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part E14 from the outside supplier should be:
Final answer:
The annual financial advantage (disadvantage) for the company as a result of buying part E14 from the outside supplier can be calculated by comparing the costs of producing the part internally versus buying it externally.
Explanation:
The annual financial advantage (disadvantage) for the company as a result of buying part E14 from the outside supplier can be calculated by comparing the costs of producing the part internally versus buying it externally.
If the company produces the part internally, it incurs various costs such as direct labor, variable costs, allocated general overhead, and the opportunity cost of using the space to make other products. On the other hand, if the company buys the part from the outside supplier, it only incurs the cost of purchasing the part.
To calculate the annual financial advantage (disadvantage), we subtract the cost of buying the part from the cost of producing the part internally and also add the additional segment margin generated from using the freed-up space. The result would be the net financial impact of the decision.
What is the quantity of money demanded when the interest rate is 6%? quantity: $ billionbillion What is the quantity of money demanded when the interest rate is 8%? quantity: $ billionbillion Choose the statement that best explains the relationship between the quantity of money demanded and the interest rate on bonds. If the interest rates increase, the quantity of money demanded decreases. If the interest rates increase, money demand falls. If the interest rates increase, money demand increases. If the interest rates increase, the quantity of money demanded increases.
Question
Using the attached hypothetical demand curve, answer the following questions:
What is the quantity of money demanded when the interest rate is 6%?What is the quantity of money demanded when the interest rate is 8%? Choose the statement that best explains the relationship between the quantity of money demanded and the interest rate on bonds.
A) If the interest rates increase, the quantity of money demanded decreases.
B) If the interest rates increase, money demand falls.
C) If the interest rates increase, money demand increases.
D) If the interest rates increase, the quantity of money demanded increases.
Answer 1) & 2)
When the interest rate is 6%, the demand for money is $40 billion, and when the interest rate climbs to 8%, the money nosedives to $20 billion.
Answer 3):
The correct choice is B)
Explanation:
The relationship between interest rate and money demand is very simple. The higher the rate, the higher the cost of capital. The higher the cost of capital, the lower the Return On Investment. Because businesses are structured to thrive on more profit or returns, business owners, generally will gun for more money when there is a lower interest rate thus creating a surge in demand.
Kindly note that the analysis is based the assumption that all other factors remain constant.
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